Austerity swells Spain’s precariat by two million

Spain’s precariat has swollen to more than 20.6 million – or  43.74% of the population, thanks to rising unemployment, wage and welfare cuts, according to the tax officials’ union.

Since 2007, austerity and neo-liberal reforms have meant two million more Spaniards live in households with incomes of less than 12,000 euros a year, finds a report name ‘Goodbye to the Middle Classes’ published by the Union Finance Ministry Technicians (Gestha).

Using official data from a number of state and regional agencies, the report reveals that there are 16 million (mainly salaried worker) households living on a thousand euros a month while there are now 2.9 million households without any income at all, and 1.7 million self-employed also defined as part of the precariat.

The gap between the incomes of the poor and the wealthy has increased, says the union and will further deteriorate unless there is a change in economic, social and tax policies which are both ‘unfair and ineffective’. It also criticised the policies of the former Socialist government that was in power until November last year.

Rising personal income tax,  valued added (sales) tax and the reduction in wages have impacted negatively on the purchasing power of those on incomes below €33,000 annually, representing 85% of workers, the report found.

Large corporations and the 1%,  thanks to tax give-ways and laxness, have been getting it easy, however. The recent ‘tax amnesty‘  for listed companies and the rich with large fortunes abroad, goes against ‘the constitutional principle of equality’ and represents ‘an unfairness to those who pay their taxes.’ Furthermore, this measure may have ‘a negative impact on tax awareness in Spain.’

To close the wealth ‘gap’ between the super-rich, big business and the rest,  the Gestha finance ministry experts have proposed a number of initiatives that they say could raise more than €60 billion per year. For example, they are calling for inspections on large corporations and personal fortunes, which account for over 70% of tax evasion, and the implementation of a wealth tax that triples the current effective rate of tax on very wealthy Spaniards.

The billions of euros this would generate could be spent on growth, jobs and essential services like health and education that are currently facing massive cuts.

El Pais